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NSW TCorp smashes Australian government green bond record

The Newcastle Light Rail, could be a beneficiary of NSW Treasury Corporation’s first green bond.
The Newcastle Light Rail, could be a beneficiary of NSW Treasury Corporation’s first green bond.

NSW Treasury Corporation’s first record breaking green bond issued on Friday will go towards low carbon transport and sustainable water projects.

On TCorp’s list of nominated projects is the Newcastle Light Rail, the Sydney Metro Northwest, and the Quakers Hill and St Mary’s Water Recycling Plants Process and Reliability Renewal project.

The green bond means NSW has now joined its eastern seaboard government peers, Victoria and Queensland, and at $1.8 billion the 10-year bond is a record.

Victoria was the first state to issue a green bond, with Treasury Corp Victoria’s flagship five-year green bond issued in July 2016.

The state’s financing authority raised $300 million towards renewables, buildings, transport and water projects.

Queensland Treasury Corporation followed with a seven-year $750 million green bond issued in March 2017.

The major banks and property funds have led the movement so far, with NAB and Stockland issuing the first green bonds in 2014.

NSW TCorp’s issuance will go towards low carbon transport and sustainable water projects. On TCorp’s list of nominated projects is the Newcastle Light Rail, the Sydney Metro Northwest, and the Quakers Hill and St Mary’s Water Recycling Plants Process and Reliability Renewal project.

The bond has been certified by the Climate Bonds Standards Board of the Climate Bonds Initiative.

It kicks off the first transaction under TCorp’s Sustainability Bond Programme (SBP) for issuing green, social and sustainable bonds that provides a mechanism for investors to contribute capital towards environmental and social goals. All projects financed under the program will align with the UN Sustainability Development Goals.

There are currently several categories that eligible green projects fall under, including clean transportation, green buildings, energy efficiency and sustainable water and wastewater management. These categories will grow and evolve over time.

Since Australia’s first deals in 2014, the total green bond issuance has reached over $10 billion.

The opportunities range from renewables and public transport, and to water and waste due to Australia’s drought-prone climate and the recycling crisis caused by China’s ban on some overseas recyclables.

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